Report claims key to streaming music’s growth is cheaper subscriptions
Article original a Music Ally
January 20th, 2014 by Stuart Dredge
What’s more, it has some numbers to put its case, claiming that if the standard price of a streaming music subscription was dropped to £5 in the UK, 40% of free users would upgrade, compared to an average of 17% at the moment.
The report suggests this would mean 2.4m more streaming music subscribers, generating between £62m and £95m of additional revenues a year in the UK alone. Bear in mind the latest BPI figures suggest that streaming subscriptions generated £103m of revenues in the UK in 2013.
It performs the same analysis for Germany, suggesting that conversion rates would increase from 9% to 40% if standard subscription costs were halved, meaning 4.7m more paying subscribers, and between €202m and €265m of additional annual revenues. The upper figure in each case is based on a 10% increase in the internet population and 10% increase in awareness of streaming music services.
“Our research shows that reducing prices will have a significant effect on subscription rates and, subsequently, be more than off-set by an increase in aggregate revenues,” said A&M’s Faisal Galaria in a statement this morning. “While reducing prices may seem like a dramatic step, with the right proposition and price points in place, there is an opportunity to build sustainable interactive music businesses and even create the Netflix of music.”